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MIDDLE CLASS MODERATES: Even as lobbying efforts from conservative groups who want larger cuts intensify, Congressional conservatives are weighing keeping the top tax bracket at 39.6%. President Trump wants this package to focus on the middle-class and not be seen as a transfer of wealth to the already wealthy. Trump was elected largely due to his populist sentiment and other Republicans are taking note. Studies from the Tax Policy Center found the highest earners would be the biggest winners under the current framework - a political narrative many Republicans want to change before the 2018 midterm cycle.

TAX TENSIONS ON THE HILL: With establishment Republican Senator Bob Corker (R-TN) retiring next year, the stakes and political ground of the Senate are shifting. First, we heard him promise to tackle Fannie Mae and Freddie Mac before leaving - now he is saying he may not vote for the tax package. Corker wants the overhaul to be permanent and reduce the deficit and he has no incentive to vote for a bill that he doesn’t believe accomplishes those two things. He’s not alone in that category - Blue Dog Democrats feel little political pressure to vote for or against the tax plan. They outlined their goals yesterday and simply won’t vote for a package they don’t think will overhaul the tax code for businesses. If Trump wants any bipartisan support, they are the lowest hanging fruit.

PRESIDENTIAL REQUEST: Following the president’s trip to Puerto Rico, the White House is requesting $29 billion additional dollars for hurricane relief. $13 billion will be aimed at Texas and Florida while another $16 billion will be added to the bankrupted National Flood Insurance Program (NFIP). If Congress forgives the debt of the NFIP, it will be attached to program reforms, such as monitoring houses that flood repeatedly. The president has already sent additional disaster relief to Florida to prepare them for the influx of people they expect from Puerto Rico.

RULES ARE MEANT TO BE BROKEN: The Treasury Department is working on rolling back a series of rules the Obama Administration put in place to prevent the wealthy from avoiding taxes. The rules limited discounts on minority shares of family-owned businesses for estate-tax purposes. The provisions have made it more difficult for people to pass down their companies to their children. The rules were found to be overly costly and burdensome. Trump addressed these rules and estate taxes in his initial tax rally - where a farmer feared if he died, his children wouldn't be able to afford the taxes on taking over the 187-year-old family property.

DEBT AND DISASTER: The president said Puerto Rico’s debt should be wiped out while talking to leaders in the disaster-stricken territory. Puerto Rico was consumed with debt causing a large financial crisis, before the storm. Trump does not have the ability to forgive their ~$74 billion debt and top Administration officials are now back peddling on his comments. Treasury Secretary Steve Mnuchin said not to take it word for word and that it wouldn't be happening. Puerto Rican bond values plunged after the remarks. Congress may end up front-loading relief and recovery funding to help the territory rebuild and pull itself out of the hole.

ATTACKING NET NEUTRALITY IN THE SUPREME COURT (CMCSA, CHTR, T, VZ, CTL, S, TMUS): Our Senior Telecom Analyst Paul Glenchur writes - a Supreme Court review of Obama era net neutrality rules could kill off common carrier broadband regulation even if Democrats win in 2020. Read the full piece here.

EVENT: HEDGEYE GOES TO AUSA OCTOBER 10: Hedgeye’s Senior Defense Analyst Lt. Gen Emerson “Emo” Gardner is hosting a defense day in DC followed by a reception. Join Emo in a “booth walk” of the largest land warfare exposition in North America. View over 720 of the world’s most important military hardware suppliers escorted by the man former Secretary of Defense Bob Gates called, “my go-to guy on the budget.” By invitation only.

EVENT: DEPUTY ENERGY SECRETARY AND FORMER OPEC PRESIDENT HEADLINE OCTOBER 11 HEDGEYE ENERGY CONF (NYC): Our Senior Energy Analyst Joe McMonigle is hosting a Hedgeye energy conference in New York City. Topics include regulating pipelines, grid reliability and energy infrastructure in the Trump Administration - as well as an OPEC meeting preview. Get the event details here.

GENERAL DAN CHRISTMAN - NORTH KOREA: "WHERE DOES THIS ALL END?”: Our Senior Advisor General Dan Christman wrote that given the hyperbolic rhetoric from both sides of the current North Korean dust-up, it’s only sensible to ask this same question: “Where, and how, does the North Korean crisis end?” Read his full piece to find out here.

CALL REPLAY - DAVID HOPPE: NEXT STEPS FOR TAX REFORM: We held a call with David Hoppe, former chief of staff to Speaker of the House Paul Ryan and Macro Policy analyst JT Taylor as they covered the road ahead for the Big Six’s tax reform plan. Dive into the details on the replay here